Analysis

A view from London: Desperately seeking EU reform

Those who say that Britons don't care about Europe would have been in for a shock.

On Wednesday (15 January) the Westminster elite flocked to the headquarters of the Institute of Mechanical Engineers, just a few hundred metres away from Big Ben and the Houses of Parliament, for a two-day conference on EU reform.

Thank you for reading EUobserver!

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

Several hundred delegates packed into the institute's handsome lecture theatre for a keynote speech by Chancellor George Osborne.

The so-called breakout discussions that followed were attended with equal enthusiasm.

A retired diplomat showed EUobserver a copy of the letters page in the British daily, The Times, in which he calls Britain the “de facto think tank for Europe.”

Despite the strong interest, the discussions had a distinctly British tone - the talk of EU reform was dominated by deregulation and the single market, principles which seem embedded in the DNA of what has been described as “a nation of shopkeepers.”

The big headline from Osborne was his threat that Britain will leave the EU if it does not reform.

The bulk of his speech spoke of the need for the EU economy to become more competitive and business friendly.

The mood among delegates was also mixture of exasperation and bemusement with the EU's institutions.

"If the EU can't be the most competitive bloc in the world then what is it there for?” Nick De Bois, a Conservative MP and a member of the Fresh Start group of backbench MPs which is leading the reform agenda, asked.

"The EU is out of touch with economic reality," his colleague, David Rutley, added.

For his part, Mats Persson, the director of Open Europe, the think tank behind the conference, claimed that liberalising Europe's services sector could be worth between 1.8 and 2.3 percent extra of its GDP.

He also took aim at Germany, citing research that 25 percent of the 800 regulated professions that remain in the EU are in Germany.

Meanwhile, Luke Johnson, a multimillionaire entrepreneur who made his first fortune from the Pizza Express restaurant chain, said start-up firms are being stifled by regulation at national and EU level and should be exempted from EU rules for three years from their birth.

"We spend more time dealing with regulation than we spend doing business," he noted.

Andrea Leadsom, who chairs the Fresh Start group, also said firms should not have adhere to EU regulation if they do not conduct business with other EU countries.

Britain's politicians often leave themselves vulnerable to the charge that they lead Europe's awkward squad and behave like an unruly relative, who spends family gatherings complaining about everything from the food to the room temperature.

But despite this, the EU pendulum appears to be swinging in Britain's favour.

Leadsom said her group is working to overcome a "certain scepticism" among other European conservative parties about UK Prime minister David Cameron's reform plans.

The Dutch and German governments have recently indicated that the European Commission should do more to cut red tape.

On the eve of an EU summit last October, Cameron's hand-picked business “Task Force” published a paper making 30 recommendations on where to change or scrap EU rules.

Based on feedback from more than 100 British and European enterprises, it said firms are being hampered by "problematic, poorly-understood and burdensome" rules.

It added that exempting small firms from health and safety reporting requirements would save €2.7 billion.

In a mini-coup for Cameron, he and European Commission chief Jose Manuel Barroso chaired a meeting devoted to the issue at the October summit, together with the leaders of Estonia, Italy, Finland, the Netherlands, Poland and Sweden.

The commission at the time said it has already cut 5,590 rules and reduced the bureaucratic burden on firms by €32 billion since 2005, but Leadsom on Wednesday voiced doubt if EU officials have any real appetite to lighten the administrative load.

"The biggest prize would be the commission taking these proposals on board," she told this website.

Mid-way through one of the Institute of Mechanical Engineers round-table discussions, one delegate reflected that a equally frank conversation on EU reform is unimaginable in France or in many of Europe's southern countries.

It is difficult to gauge how realistic these politicians and policy wonks think their plans are.

But engagement with British EU critics is surely better than sullen silence.

Opinion

Defining what constitutes 'rule of law' violations may be more difficult than the EU Commission proposes, as it tries to link cohesion funds in east Europe to judicial independence. A key question will be who is to 'judge' those judges?